Lott Company uses a;ob order cost system and app es overhead to product on on th
ID: 2460879 • Letter: L
Question
Lott Company uses a;ob order cost system and app es overhead to product on on the basis of dlrec: labor cossts. On january 1. 2017, lob No. 50 was the only job in process, the costs ircurred prior to January 1 or. this job were as follows: drect materiais $23,400, direct labor $14,040, and manufacturing overhead $18,720. As of January I. Job No. 49 had been completed at a cost of $ 105,300 and was part of finshed goods Inventory. There was a $17,550 balance in the Raw Materials Inventory account. During the month of january, Lott Company began production on lobs 51 and 52, and completed lobs 50 and 51. Jobs 49 ard 50 were also sod on accoLnt during the month for $142,740 and $184,860, respectively. The following additional events occurred during the month. Calculate the predetermined overhead rate for 2017, assuming lott company estimates total manufacturing overthead costs of $19,000, and slrect kirect labor hours of 23,400 for the year. Open job cost sheets for jobs 50,51, and 52.Enter the january 1 balances on the job cost sheet for job No.50.Explanation / Answer
1. Pre determine Overhead rate = estimate overhead cost / direct labour cost
= $982800 / $819000
= 120%
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